Opinion Of accounts and accountability

In India,the CAG is only an ex-post auditor,not an investigating agency. It needs to be strengthened further.

August 29, 2011 12:05 AM IST First published on: Aug 29, 2011 at 12:05 AM IST

Recently,there has been sharp focus on the Comptroller and Auditor General (CAG) of India. The CAG report on the 2G spectrum allocation provided a credible basis both for the CBI investigation and the hearings of the Public Accounts Committee (PAC) of the Parliament. Similarly,the CAG report on multiple irregularities related to the Commonwealth Games has proved embarrassing for the government. CAGs report on the Adarsh housing scam in Maharashtra adds to the woes of a beleagured government. On the horizon are reports on the working of the civil aviation and petroleum ministries on the purchase of aircrafts and cost overruns on production-sharing contracts.

Questions are being asked as to whether the CAG has overstepped its constitutional powers. Aspersions are also being cast as to whether these reports are setting the agenda of the national dialogue.

We must understand the role and obligations of the CAG under the Constitution of India and in light of the fact that separation of powers is one of the basic features of the Constitution. It can be nobodys case that everything that the CAG says is gospel truth. As the principal auditor,it is his obligation to point out deviations and irregularities as he perceives and it is for the concerned ministry or institution to reply,respond,correct and initiate follow up action wherever appropriate. Sensationalising the CAGs findings not only politicises a constitutional entity but distracts from the objectivity of his findings.

There are however many other issues relating to the working of the CAG. First,the CAG has performed the constitutional mandate given to him. The CAG is the guardian of the public purse for both the Centre and the states. This is the reason why Dr B.R. Ambedkar said that the CAG shall be the most important officer under the Constitution of India. The enormous growth in the size and complexity of government budget also has a bearing on the duties of the CAG.

Second,unlike many other countries like Japan,New Zealand,Australia and France,the CAG in India mainly performs the function of ex-post audit. Many regretfully describe it as a dissection well after rigor mortis has set in. Unfortunately,it doesnt have the legal power to enforce action on its findings,recover losses of government money and property and initiate action against delinquent officials.

Third,the National Commission to Review the Working of the Constitution had recommended the creation of a multi-member audit commission on the lines of Election Commission,whose members may have the same constitutional status and terms of service as the CAG. A similar position already exists in other countries like Japan,France,Germany,South Korea in the form of audit boards or audit courts.

Fourth,the Constitution of India visualised the CAG to be both comptroller as well as auditor-general. However,in practice,the CAG is only fulfilling the role of an auditor-general and not that of a comptroller. The government by an executive order assigned the role of the comptroller on the Controller General of Defence Accounts. However,the constitutional obligation of acting as a comptroller rests only with the CAG,a function which he has unfortunately not discharged. In this respect,the CAG of India differs from the CAG of Britain,which has powers and functions of both comptroller as well as the auditor-general.

Fifth,the Constitution does not lay down any qualifications for the appointment of the CAG and does not prescribe any procedure for making the appointment except that the CAG shall be appointed by the President of India. In the UK,the appointment of the CAG is ratified by the House of Commons on the recommendation of the PM made in agreement with the chairman of the PAC.

Sixth,there is no system of external audit of the CAG in India. External audit of the office of the CAG exists in the UK based on the principle that the agency that audits other outfits should itself demonstrate professional soundness and efficiency.

Seventh,it is believed that CAG has recommended some two years ago for amending the Act of 1971 to widen its scope with growing number of public-private partnerships and the spending by local bodies largely remaining outside its purview.

Finally,the CAG is an examining agency and not an investigating one and nor does it have the sweeping powers like some other functional democracies. It is expected to consider the efficiency,economy and effectiveness of all public expenditures and revenue and is the most important watchdog in our democratic set up. India has entered an uncertain phase of governance. Coalition politics cripples purposeful financial rectitude. In these uncertain times,which may last for long,there is a need to strengthen the CAG further.

The writer is a Rajya Sabha MP